Earlier this summer we had a chance to read about the experiences of MaRS Centre for Impact Investing director Ted Anderson at the G8 Social Impact Investment Forum as he described Canada’s position and opportunities in impact investing.
We further this conversation with Adam Jagelewski, associate director at the MaRS Centre for Impact Investing, who presents new insights on the Canadian impact-investing landscape after returning from the Policy Innovation in Impact Investing conference in London, England.
In early July, Adam travelled across the pond to London to represent MaRS, acting as Canada’s delegate at the conference, which was organized by the Impact Investing Policy Collaborative (IIPC). The IIPC is a global community of researchers and policymakers who aim to develop the role of policy worldwide in enabling private investment for public good and financial returns. The collaborative strives to advance impact-investing markets by constructing an international network for policy research and innovation.
This year’s conference focused on the development and formal launch of The London Principles, a set of guidelines for government officials considering impact investing as a tool to address social objectives in their own countries.
The five London Principles include:
Will Canada adopt The London Principles? How is the United Kingdom so far ahead on the impact-investing ladder? What are the implications of these new developments for MaRS and Canada?
I sat down with Adam upon his return from England and he was able to shed some light on the situation.
How does Canada stack up on social finance policy globally?
Unfortunately, my answer at this point is largely about what could be, rather than what is. Despite having one of the largest non-profit sectors in the world—defined by organizations with a genuine interest in enhancing their innovative capacities—our governments have been slow to adapt or create the necessary conditions to enable the growing field.
The regulatory framework for charitable activities is outdated and restricting. For example, despite declining government contribution opportunities, non-profit organizations are limited in what earned income activities they can pursue and are restricted by old rules determining what they can and cannot invest in. Part of the issue is that our charities are regulated by an entity better known for administering our tax code.
How is the United Kingdom so advanced on the topic of impact investing?
While the UK is acknowledged as the global leader in impact investing, it didn’t come without significant effort, trial and error. Over the course of the last 10+ years, both the Labour and Conservative parties have forged policy to support investment and related activity.
What’s most impressive to me, especially under the current David Cameron leadership, is the centre-stage profile that impact investment has taken and how they are trying to embed it within their broader economic development platform. They see impact investment as an opportunity to empower individuals and citizens to take ownership of the pressing social challenges they are faced with.
Through volunteerism, social enterprise and social investment, the government has put forth a set of policies and tools to catalyze a market (e.g., Social Investment Wholesale Bank [Big Society Capital], Social Outcomes Fund, Technical Assistance funds etc.). In fact, 2013 has been impact investment’s best year, highlighted by a commitment in G8 discussions, and the UK has everything to do with that.
Will Canada soon adopt The London Principles?
There are already a number of Canadian examples of successful application of The London Principles. In 2010, British Columbia was the first province to undertake a consultation process on the development of Community Contribution Companies, successfully operating on the stakeholder stewardship principle. Canadian B Corporations are excellent examples of transparency, as their mantra is to reach high standards of social and environmental performance while openly sharing their progress toward their achievements with stakeholders and the public.
Principles aside, the better question is whether Canada—and its governments in particular—will take a leadership role in developing the entire market. Employment and Social Development Canada (the federal department formerly known as Human Resources and Skills Development Canada) has recently undergone some changes, and the field is anxious to see how this will affect the pace of play.
And let’s not forget about the role of the provinces; we have significant challenges to overcome in areas of health, housing and homelessness that social finance may provide solutions to. The London Principles can help socialize the concepts of social finance and impact investing, and lay the ground rules for activity in the country, but nothing can replace government leadership that mobilizes new capital sources and market players.
How does the information you learned at the conference apply to MaRS and the Centre for Impact Investing?
MaRS’ reach is expanding. We are growing and developing a treasure chest of assets grounded on the tenets of multi-sector collaboration: The Clean Energy Institute, EXCITE, Solutions Lab and Data Catalyst are all examples of what can happen when purpose, engagement and transparency are at the forefront of design and implementation. These principles were embedded in the vision of our founder and live on under the leadership of our current CEO, Ilse Treurnicht.
The activities at MaRS are just some of the examples of the heightened level of social entrepreneurship activity in our country and the need for hybrid solutions that challenge commonly held business-as-usual assumptions. MaRS and our Centre for Impact Investing will continue to be an active part of the discussion about the future of social finance in the country—we expect big things.
Read the 2013 IIPC conference recap for more details on lessons learned at the event.